---
title: "Why Feldstein-Horioka Correlations Vary: Demographics and the Savings Retention Puzzle"
author: "Brian Peters"
date: "2026"
version: "20260224_ssrn"
abstract: |
  The Feldstein-Horioka puzzle---the surprisingly high correlation between national savings and investment---has defied explanation for 45 years. We show that the pooled savings retention coefficient masks enormous demographic heterogeneity. Using an expanded panel of up to 170 countries over 1990--2024, we find that the baseline pooled retention coefficient of 0.054 averages across two very different regimes: aging economies with strong savings-investment links (home bias, pension fund allocation, mature financial systems) and young economies where domestic savings and investment are only weakly related (foreign capital finances investment, savings are too small to drive accumulation). When we interact the savings rate with the Z1 demographic polynomial---an aging index where higher values correspond to older populations (e.g., Japan = +1.67, Nigeria = -3.20)---the retention coefficient at the demographic mean rises to 0.259 and the S x Z1 interaction is +2.32 (p < 0.001), with R-squared rising from 0.071 to 0.180. The positive interaction means aging economies retain more of each marginal dollar saved for domestic investment. The result strengthens at longer horizons (3.30 at 5 years, 3.50 at 10 years), survives income-level controls, and holds within both low- and high-income subsamples. Demographics and financial openness (KAOPEN) independently weaken the pooled coefficient, but their multiplicative interaction is insignificant (p = 0.390). These findings suggest that the original high FH coefficient reflected the demographic composition of early OECD samples---mature economies with strong home bias---and the secular decline reflects the expansion of the global sample to include younger economies with weaker savings-investment links. This interpretation is consistent with our cross-sectional results, though we do not separately decompose the time trend into composition versus integration effects.
keywords: "Feldstein-Horioka puzzle, savings retention, demographics, capital mobility, age structure, current account"
jel: "F21, F32, F41, J11"
---

# 1. Introduction

In 1980, Feldstein and Horioka published one of the most influential and puzzling findings in international macroeconomics: national savings and investment rates are highly correlated across countries, with a retention coefficient near unity. If capital were perfectly mobile, savings in one country could finance investment anywhere---the cross-sectional correlation should be weak. The near-unity coefficient was interpreted as evidence of low international capital mobility, despite the theoretical presumption and policy reality of increasingly open capital markets.

Forty-five years of subsequent research has documented a secular decline in the retention coefficient but has not resolved the underlying puzzle. The coefficient has fallen from near-unity to somewhere between 0.05 and 0.40 depending on the sample and period (Blanchard and Giavazzi, 2002; Coakley et al., 1998), but it remains positive and often significant, even in samples of financially open economies. Explanations range from endogenous policy responses (Obstfeld, 1986) to country size effects (Baxter and Crucini, 1993) to common shocks driving savings and investment simultaneously.

We propose a new explanation: the pooled Feldstein-Horioka coefficient masks enormous demographic heterogeneity. Using an expanded panel of up to 170 countries over 1990--2024, we show that the savings retention coefficient is endogenous to population age structure. The $Z_1$ demographic polynomial is an aging index: higher values correspond to older populations (Japan $Z_1 \approx +1.7$; Nigeria $Z_1 \approx -3.2$). The baseline pooled coefficient of 0.054 is misleading---it averages across aging societies with strong savings-investment links and young societies where domestic savings and investment are only weakly related. When we interact the savings rate with $Z_1$, the retention coefficient at the demographic mean rises to 0.259 and the savings$\times Z_1$ interaction is $+2.32$ ($p < 0.001$). The $R^2$ rises from 0.071 to 0.180.

The result strengthens at longer horizons---precisely the opposite of what one would expect from a spurious correlation. Using 5-year non-overlapping averages, $S \times Z_1$ increases to 3.30; at 10-year averages it reaches 3.50. The pattern survives income-level controls and holds within both low-income and high-income subsamples, ruling out development-level confounding. Demographics and financial openness (KAOPEN) independently affect the retention coefficient, but their multiplicative interaction is insignificant ($p = 0.390$), suggesting additive rather than synergistic channels.

A preliminary question is whether demographics predict capital account policy itself, which would complicate interpretation. We find that demographics strongly predict the *level* of capital account openness ($Z_1 = 7.15$, $p < 0.001$) but do not predict *changes* in KAOPEN ($Z_1 = 0.31$, $p = 0.122$). A Granger-style horizon analysis confirms null predictability at all horizons. Demographics shape where countries end up on the openness spectrum through slow structural forces, not through discrete policy changes. This result validates treating KAOPEN as a separate conditioning variable in the FH analysis.

Our findings suggest that the original Feldstein-Horioka correlation reflected, in part, a demographic composition artifact. The early OECD sample (1960s--1970s) consisted of mature economies with strong savings-investment links: large pension systems, deep domestic financial markets, and home bias in asset allocation that naturally channeled savings into domestic investment. As the global sample has expanded to include countries at earlier demographic stages---where foreign capital finances investment and domestic savings are too small to drive accumulation independently---the pooled FH coefficient has declined. Our results are consistent with the hypothesis that this secular decline reflects changing sample composition as much as increasing capital mobility.

The paper proceeds as follows. Section 2 reviews the Feldstein-Horioka literature and its intersection with demographics. Section 3 describes the data. Section 4 establishes that demographics predict openness levels but not changes. Section 5 presents the core FH results. Section 6 discusses implications, and Section 7 concludes.

# 2. Literature Review

## 2.1 The Feldstein-Horioka Puzzle

Feldstein and Horioka (1980) regressed investment rates on savings rates across 16 OECD countries for 1960--1974 and found a retention coefficient of 0.89. This "FH puzzle" launched a vast literature debating whether the coefficient measures capital mobility, policy endogeneity, or something else entirely. Obstfeld (1986) argued that governments systematically target current account balance, creating an endogenous policy response that generates the high correlation independently of capital mobility. Baxter and Crucini (1993) showed in a two-country model that the FH coefficient depends on country size and the persistence of productivity shocks. Coakley et al. (1998) documented the secular decline and argued it reflected genuine financial integration.

## 2.2 The Secular Decline

Blanchard and Giavazzi (2002) showed that within the euro area, the savings-investment correlation collapsed following monetary integration, and argued more broadly that financial globalization was eroding the FH regularity. However, even in recent panels the coefficient remains positive and often significant (Obstfeld, 2012), suggesting that some structural force beyond capital controls sustains the correlation. Our paper identifies demographics as one such force.

## 2.3 Demographics and Savings

The lifecycle hypothesis (Modigliani, 1970) provides the theoretical link between age structure and savings behavior. For the FH puzzle specifically, the relevant mechanism operates through the institutional infrastructure that channels savings to investment. Aging economies have accumulated deep financial systems, large pension funds with domestic mandates, and institutional home bias---all of which tighten the savings-investment link. Young economies, by contrast, often rely on foreign capital (FDI, aid, remittances) to finance investment, while domestic savings are insufficient to drive accumulation independently. Higgins (1998) showed that the age distribution predicts current accounts, and our companion multilateral papers confirm this in both 69-country and 170-country panels. The connection to FH is direct: if demographics determine the institutional structure that links savings to investment, the pooled FH coefficient confounds demographic heterogeneity with capital immobility.

## 2.4 Capital Account Liberalization and Demographics

Quinn (1997) and Chinn and Ito (2006) developed indices of capital account openness that have become standard controls in international macro. Our companion paper on causal identification (Peters, 2026c) found that capital account opening *weakens* the demographic channel for current accounts (triple-difference $p = 0.049$). This creates a potential feedback loop: demographics drive external balances, external imbalances create pressure for policy responses (including liberalization), and liberalization in turn modifies the demographic channel. We address this by showing that demographics do not predict discrete liberalization events (only levels), reducing the reverse causation concern for the FH analysis.

## 2.5 Connection to the Lucas Paradox

Lucas (1990) asked why capital does not flow from rich to poor countries despite higher marginal returns. Our multilateral and gravity bilateral analyses show that demographics provide a partial answer: capital flows from aging (savings-rich) to young (investment-rich) countries, and this demographic channel is gated by financial openness. The FH analysis in this paper complements that finding from the savings side: young economies have weak savings-investment links precisely because domestic savings are insufficient to finance investment, creating the gap that foreign capital fills. Aging economies, by contrast, have strong domestic savings-investment links that sustain a high FH coefficient even as capital accounts open.

# 3. Data and Methodology

## 3.1 Panel Construction

We employ the expanded panel dataset comprising up to 170 countries over 1990--2024. National savings rates ($S/\text{GDP}$) and gross investment rates ($I/\text{GDP}$) are from the World Bank's World Development Indicators. The Chinn-Ito financial openness index (KAOPEN) measures de jure capital account openness. Demographic variables are orthogonal polynomial projections $Z_1, Z_2, Z_3$ of the full age distribution, following Higgins (1998) and Koomen and Wicht (2023).

For robustness, we construct 5-year and 10-year non-overlapping averages to address persistence concerns, and split the sample by income terciles (using mean GDP per capita over the sample period) to test whether results are driven by development level.

## 3.2 Estimation

The baseline FH regression is:

$$I_{it}/\text{GDP}_{it} = \alpha + \beta_0 \, S_{it}/\text{GDP}_{it} + \gamma' Z_{it} + u_{it}$$

We then augment with savings$\times$Z interactions:

$$I_{it}/\text{GDP}_{it} = \alpha + \beta_0 \, S_{it}/\text{GDP}_{it} + \beta_1 (S \times Z_1)_{it} + \gamma' Z_{it} + u_{it}$$

All models are estimated by Panel GLS with Prais-Winsten AR(1) correction, country and year fixed effects. With $S \times Z_1$ included, the reported savings coefficient $\hat{\beta}_0$ is the retention slope evaluated at $Z_1 = 0$ (the cross-sectional mean, since $Z_1$ is demeaned by construction); the effective retention at any demographic position is $\hat{\beta}_0 + \hat{\beta}_1 Z_1$. All reported $R^2$ values are pseudo-$R^2$ from the GLS procedure and should be interpreted as goodness-of-fit measures rather than variance decompositions.

## 3.3 Estimands and Limitations

All specifications are descriptive panel associations. The savings retention coefficient measures conditional correlation, not a structural capital mobility parameter. The S$\times$Z interaction captures heterogeneity in this conditional correlation across demographic stages. We do not claim to identify capital mobility directly; rather, we show that the FH coefficient---whatever it measures---is systematically related to demographic structure.

# 4. Do Demographics Predict Capital Account Policy?

Before analyzing the FH puzzle, we address a potential confound: if demographics predict capital account liberalization, then the FH interaction could reflect policy endogeneity rather than structural savings behavior.

## 4.1 Direct Prediction

We estimate:

$$\Delta\text{KAOPEN}_{it} = \gamma' Z_{it} + \beta' X_{it} + u_{it}$$

$Z_1$ does not significantly predict liberalization direction ($\hat{\gamma}_1 = 0.31$, $p = 0.122$). However, the KAOPEN *level* regression yields $Z_1 = 7.15$ ($p < 0.001$). Demographics predict where countries end up on the openness spectrum but not the direction of discrete policy changes.

**Table 1: Demographics and Capital Account Policy**

| Dependent Variable | $Z_1$ Coef | SE | p-value | N | Pseudo-R$^2$ |
|-------------------|-----------|-----|---------|---|-------|
| $\Delta$KAOPEN | 0.308 | 0.199 | 0.122 | 5,710 | 0.003 |
| KAOPEN level | 7.150*** | 1.454 | 0.000 | 5,758 | 0.251 |
| P(liberalize) | 0.384 | 0.263 | 0.144 | 5,710 | 0.008 |

*Notes: Panel GLS with entity and year FE, AR(1) correction. Significance at 1%, 5%, and 10% denoted by triple, double, and single asterisks respectively.*

## 4.2 Granger-Style Horizon Analysis

Table A1 shows that $Z_1$ has no significant predictive power for future $\Delta$KAOPEN at any horizon from $t+1$ to $t+5$. The $R^2$ is near zero at all horizons. This substantially reduces the concern that demographics drive both savings behavior *and* liberalization timing, which would confound the FH interaction, though we cannot rule out slow-moving co-evolution that operates below the frequency of annual KAOPEN changes.

## 4.3 Income Splits

Income splits show no significant differences between high-income ($p = 0.433$) and low-income ($p = 0.258$) subsamples for $\Delta$KAOPEN prediction, confirming that the null is not driven by sample composition.

## 4.4 Interpretation

Demographics shape capital account openness through slow structural forces captured in levels---aging societies gradually converge to more open capital accounts---rather than through discrete liberalization events. This validates our FH analysis: since demographics do not predict *when* countries liberalize, the savings$\times$Z interaction in the FH regression captures structural demographic heterogeneity in capital flows rather than endogenous policy responses.

# 5. Demographics and the Feldstein-Horioka Puzzle

## 5.1 Baseline Retention Coefficient

Table 2 reports the core Feldstein-Horioka results. The baseline savings retention coefficient is $\hat{\beta}_0 = 0.054$ ($p < 0.001$)---low by historical standards, reflecting the well-documented secular decline in home bias. Adding Z controls barely changes this ($\hat{\beta}_0 = 0.052$). At face value, the 0.054 coefficient suggests very high capital mobility: only 5.4 cents of each additional dollar saved are retained for domestic investment. However, this pooled coefficient averages across heterogeneous demographic regimes.

## 5.2 Demographic Heterogeneity Unmasked

Adding savings$\times$Z interactions transforms the picture. The reported savings coefficient rises to $\hat{\beta}_0 = 0.259$ ($p < 0.001$)---but this is now the conditional retention slope evaluated at the demographic mean ($Z_1 = 0$), not a pooled average. The interaction $S \times Z_1$ is $+2.32$ ($p < 0.001$), meaning each unit increase in $Z_1$ (toward older demographic structure) raises the retention slope by 2.32. The $R^2$ rises from 0.071 to 0.180.

**Table 2: Feldstein-Horioka Results --- Savings Retention and Demographic Interactions**

| Specification | Savings Coef | $S \times Z_1$ | $S \times$KAOPEN | N | Pseudo-R$^2$ |
|--------------|-------------|----------------|-----------------|---|-------|
| Baseline (I = $\alpha$ + $\beta$S) | 0.054*** | --- | --- | 5,661 | 0.071 |
| + Z controls | 0.052*** | --- | --- | 5,661 | 0.121 |
| + S$\times$Z interactions | 0.259*** | 2.32*** | --- | 5,661 | 0.180 |
| + S$\times$KAOPEN | 0.130*** | --- | -0.075*** | 5,204 | 0.155 |
| Triple (S$\times$Z$\times$KAOPEN) | 0.189*** | 0.031** | -0.071*** | 5,204 | 0.209 |

*Notes: Panel GLS with entity and year FE, AR(1) correction. "Savings Coef" is the retention slope at Z1 = 0. Triple interaction S x Z1 x KAOPEN = 0.004 (p = 0.390). Significance at 1%, 5%, and 10% denoted by triple, double, and single asterisks respectively.*

The interpretation is as follows. Since $Z_1$ is an aging index (higher values = older populations; Japan $\approx +1.7$, Nigeria $\approx -3.2$), the positive interaction means aging economies exhibit *stronger* savings retention---each additional dollar saved is more likely to be invested domestically. This reflects the institutional infrastructure that mature economies accumulate over the demographic transition: deep pension systems with domestic mandates, home bias in asset allocation, and thick local financial markets that channel savings into domestic investment. Young economies, by contrast, have weak savings-investment links: domestic savings are insufficient to drive investment, which is instead financed by foreign capital (FDI, aid, remittances).

Figure 1 plots the implied retention coefficient $\hat{\beta}_0 + \hat{\beta}_1 Z_1$ across the empirical distribution of $Z_1$. At the 10th percentile (young, pre-transition economies), the implied retention is near zero or negative; at the 90th percentile (aging OECD), retention exceeds the original Feldstein-Horioka estimates.

The pooled coefficient of 0.054 is thus a weighted average of two very different regimes: one in which savings and investment are tightly linked (aging economies with strong institutional home bias) and one in which savings and investment are nearly independent (young economies where foreign capital dominates investment financing). The original "puzzle"---why retention was so high in the 1960s--1970s OECD---partly reflects the demographic composition of that sample: sixteen mature economies at the stage of their transitions when savings-investment links are strongest.

## 5.3 Robustness: Long Differences

The S$\times$Z interaction is robust to persistence concerns (Table 3). Using 5-year non-overlapping averages, the coefficient increases to 3.30 ($p < 0.001$); at 10-year averages it reaches 3.50 ($p < 0.001$). The result *strengthens* in long differences, ruling out a spurious correlation driven by common trends or nonstationarity. If anything, the annual estimate understates the demographic heterogeneity by mixing across business-cycle phases that temporarily perturb savings-investment correlations.

**Table 3: Long-Difference Robustness**

| Frequency | Savings Coef | $S \times Z_1$ | N | Pseudo-R$^2$ |
|-----------|-------------|----------------|---|-------|
| Annual | 0.259*** | 2.32*** | 5,661 | 0.180 |
| 5-year averages | 0.343*** | 3.30*** | 1,188 | 0.236 |
| 10-year averages | 0.345*** | 3.50*** | 698 | 0.253 |

*Notes: Panel GLS with entity and year FE, AR(1) correction. All S x Z1 coefficients p < 0.001. Significance at 1% denoted by triple asterisks.*

## 5.4 Robustness: Income Controls and Tercile Splits

Adding $\log(\text{GDP per capita})$ and GDP growth as controls barely attenuates the interaction ($S \times Z_1 = 2.19$, $p < 0.001$), confirming that the result is not a functional-form artifact of development level.

Tercile splits by income group reveal an informative pattern:

- **Low-income tercile**: $S \times Z_1 = 2.49$ ($p < 0.001$)
- **Middle-income tercile**: $S \times Z_1 = -0.077$ (imprecisely estimated; SE = 0.858)
- **High-income tercile**: $S \times Z_1 = 1.38$ ($p < 0.001$)

The demographic FH heterogeneity is strongest at both ends of the income distribution and absent in the middle. We treat the middle-income null as a fact to be explained rather than assigning a single mechanism, but it is consistent with middle-income countries experiencing offsetting forces: they are advanced enough that domestic savings begin to matter for investment, but not so mature that institutional home bias dominates the savings-investment link.

## 5.5 KAOPEN Interactions

Adding KAOPEN interactions shows that financial openness independently weakens retention ($S \times \text{KAOPEN} = -0.075$, $p < 0.001$). Demographics and openness both affect the retention slope, but the triple interaction $S \times Z_1 \times \text{KAOPEN}$ is not significant ($p = 0.390$), indicating that the two channels are additive rather than multiplicative. Demographics do not amplify or dampen the effect of financial openness on retention; each operates independently.

This independence is informative. It means that demographics and capital account policy are separate forces shaping the FH correlation. Neither subsumes the other: a financially open economy retains less savings than a closed economy at the same demographic stage (the KAOPEN channel), and an aging economy retains more savings than a young economy at the same openness level (the demographic channel). The secular decline in the pooled FH coefficient is consistent with both forces operating in parallel---financial integration reducing retention at all demographic stages, while the expanding global sample increasingly includes young economies with inherently weak savings-investment links.

# 6. Discussion

## 6.1 Reinterpreting the FH Puzzle

Our results suggest a reinterpretation of the FH puzzle. The original finding of near-unity retention in 1960--1974 OECD data reflected, in part, the demographic composition of the sample: sixteen mature economies at a late stage of the demographic transition, with deep pension systems, strong institutional home bias, and thick domestic financial markets that naturally channeled savings into domestic investment. The "puzzle" was not that capital was immobile---it was that the institutional infrastructure built over the demographic transition created a tight savings-investment link that looked like capital immobility in a cross-sectional regression.

As the global sample has expanded to include countries at diverse demographic stages---many of them young economies where domestic savings and investment are weakly related---the pooled FH coefficient has declined. This decline is commonly attributed to financial integration (Blanchard and Giavazzi, 2002), and financial openness is indeed part of the story ($S \times \text{KAOPEN} = -0.075$, $p < 0.001$). But demographics provide an independent explanation: the interaction coefficient of $+2.32$ on $S \times Z_1$ shows that aging economies have systematically stronger savings-investment links, and the inclusion of younger economies in expanded samples mechanically pulls down the pooled coefficient.

## 6.2 High Retention Does Not Imply Low Mobility

An important caveat: high savings retention in aging economies does not necessarily imply low capital mobility. The FH coefficient captures an equilibrium correlation, not a structural mobility parameter. Aging economies can have fully open capital accounts and yet exhibit high savings retention if domestic institutional infrastructure---pension funds with home-country mandates, deep local bond markets, habitual allocation to domestic equities---channels savings into domestic investment as a first-order flow, even when capital is free to leave. The retention slope measures where savings *end up*, not where they *could go*. Indeed, our KAOPEN results show that financial openness and demographic retention operate independently: opening the capital account reduces retention at all demographic stages, but aging economies retain more savings even after conditioning on openness. The institutional mechanisms that link savings to investment in mature economies (fiduciary mandates, home bias, local-currency pension liabilities) are structural features of demographic maturity, not barriers to capital mobility.

## 6.3 Connection to the Broader Project

The FH result connects to several findings from our broader demographics--capital flows research program, though the connection requires care. Our multilateral analysis shows that the Z vector predicts current accounts ($R^2 \approx 0.31$), and our gravity bilateral analysis shows that 58% of demographic capital flows are rate-mediated. These findings concern the *level* of net flows (CA = S $-$ I), while the FH result concerns the *marginal relationship* between S and I. The two are not contradictory: aging economies can simultaneously run current account surpluses (S $>$ I in levels) and have high savings retention slopes (S and I move together at the margin). The FH finding adds an institutional dimension: the savings-investment link in aging economies reflects accumulated financial infrastructure, not just lifecycle savings behavior.

## 6.4 Limitations

We emphasize three limitations. First, the savings retention coefficient is a reduced-form conditional correlation, not a structural capital mobility parameter. Our finding that it varies with demographics does not directly measure changes in capital mobility---it measures changes in the equilibrium savings-investment correlation that reflect both mobility and structural demand/supply factors. Second, the panel associations cannot establish causality: demographics, savings, and investment are jointly determined. Third, the middle-income null (Section 5.4) suggests the demographic mechanism operates differently at intermediate development stages, which our framework does not fully explain.

# 7. Conclusion

The Feldstein-Horioka puzzle---the surprisingly high correlation between national savings and investment---has puzzled international macroeconomists for 45 years. We show that the pooled savings retention coefficient masks enormous demographic heterogeneity. When we condition on demographic structure, the retention coefficient varies from near-zero in young economies (where foreign capital finances investment and domestic savings play a limited role) to substantially positive in aging ones (where institutional home bias, deep pension systems, and mature financial markets tightly link savings to domestic investment). The demographic interaction ($S \times Z_1 = +2.32$, $p < 0.001$) is among the strongest results in our demographics--capital flows research program.

The result strengthens at longer horizons (3.30 at 5 years, 3.50 at 10 years), survives income-level controls, and holds within both low- and high-income subsamples. Demographics and financial openness independently shape the retention slope, but their multiplicative interaction is insignificant. These findings are consistent with the hypothesis that the secular decline in the pooled FH coefficient reflects not only financial integration but also the expansion of the global sample to include younger economies with inherently weak savings-investment links, though we do not formally decompose the time trend into composition versus integration components.

We do not claim to have "solved" the FH puzzle---the coefficient captures a complex equilibrium object influenced by many forces. But we have identified a systematic source of heterogeneity that has been overlooked for four decades. The original FH correlation was estimated on a sample of mature OECD economies at a demographic stage when savings-investment links are strongest; the "puzzle" was partly a selection artifact.

# Appendix

## Table A1: Granger-Style Horizon Analysis --- $Z_1$ Predicting Future $\Delta$KAOPEN

| Horizon | $Z_1$ Coef | p-value | Pseudo-R$^2$ |
|---------|---------|---------|-----|
| t+1 | 0.231 | 0.238 | 0.002 |
| t+2 | 0.179 | 0.347 | 0.005 |
| t+3 | 0.130 | 0.487 | 0.005 |
| t+4 | 0.108 | 0.560 | 0.004 |
| t+5 | 0.015 | 0.935 | 0.005 |

No significant predictability at any horizon. Near-zero $R^2$ at all horizons confirms demographics predict the *level* of capital account openness, not discrete liberalization events.

# References

Baxter, M., & Crucini, M. J. (1993). Explaining saving-investment correlations. *American Economic Review*, 83(3), 416--436.

Blanchard, O., & Giavazzi, F. (2002). Current account deficits in the euro area: The end of the Feldstein-Horioka puzzle? *Brookings Papers on Economic Activity*, 2002(2), 147--186.

Chinn, M. D., & Ito, H. (2006). What matters for financial development? Capital controls, institutions, and interactions. *Journal of Development Economics*, 81(1), 163--192.

Coakley, J., Kulasi, F., & Smith, R. (1998). The Feldstein-Horioka puzzle and capital mobility: A review. *International Journal of Finance & Economics*, 3(2), 169--188.

Feldstein, M., & Horioka, C. (1980). Domestic saving and international capital flows. *Economic Journal*, 90(358), 314--329.

Higgins, M. (1998). Demography, national savings, and international capital flows. *International Economic Review*, 39(2), 343--369.

Koomen, M., & Wicht, A. (2023). Demographics and current account imbalances. *Journal of International Economics*, 144, 103792.

Lucas, R. E. (1990). Why doesn't capital flow from rich to poor countries? *American Economic Review*, 80(2), 92--96.

Modigliani, F. (1970). The life cycle hypothesis of saving and intercountry differences in the saving ratio. In W. A. Eltis, M. F. G. Scott, & J. N. Wolfe (Eds.), *Induction, Growth and Trade* (pp. 197--225). Clarendon Press.

Obstfeld, M. (1986). Capital mobility in the world economy: Theory and measurement. *Carnegie-Rochester Conference Series on Public Policy*, 24, 55--103.

Obstfeld, M. (2012). Does the current account still matter? *American Economic Review*, 102(3), 1--23.

Quinn, D. (1997). The correlates of change in international financial regulation. *American Political Science Review*, 91(3), 531--551.
